Correlation Between Europacific Growth and Mfs International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Mfs International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Europacific Growth and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Mfs International Growth, you can compare the effects of market volatilities on Europacific Growth and Mfs International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Europacific Growth with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Mfs International.
Diversification Opportunities for Europacific Growth and Mfs International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europacific and Mfs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Mfs International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Growth and Europacific Growth is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Europacific Growth Fund are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Growth has no effect on the direction of Europacific Growth i.e., Europacific Growth and Mfs International go up and down completely randomly.
Pair Corralation between Europacific Growth and Mfs International
Assuming the 90 days horizon Europacific Growth is expected to generate 1.44 times less return on investment than Mfs International. In addition to that, Europacific Growth is 1.05 times more volatile than Mfs International Growth. It trades about 0.04 of its total potential returns per unit of risk. Mfs International Growth is currently generating about 0.06 per unit of volatility. If you would invest 4,096 in Mfs International Growth on August 30, 2024 and sell it today you would earn a total of 944.00 from holding Mfs International Growth or generate 23.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Mfs International Growth
Performance |
| Timeline |
| Europacific Growth |
| Mfs International Growth |
Europacific Growth and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Mfs International
The main advantage of trading using opposite Europacific Growth and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Mfs International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mfs International will offset losses from the drop in Mfs International's long position.| Europacific Growth vs. Baillie Gifford Health | Europacific Growth vs. Alger Health Sciences | Europacific Growth vs. Delaware Healthcare Fund | Europacific Growth vs. Fidelity Advisor Health |
| Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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